Morning Update – Hanging On

It really does feel like we’re walking parallel to a cliff at the moment, with both Brexit and US-China trade tensions reaching boiling point….

GBP

As mentioned in yesterdays “no news is good news” blog, the ‘fear gauge’ is sparking just that – fear. GBP stayed around 11 month lows against USD yesterday on worries over a hard Brexit from the EU, whilst simmering US-China trade tensions supplied the continual strength we’ve been seeing for the dollar. Comments from officials about a ‘no-deal Brexit’ sparked fears of Britain out of the EU without securing a trade agreement.

In addition, Theresa May is remaining eerily quiet at the moment on route to her trip to Scotland to see Nicola Sturgeon. It will be interesting to see what comes of the meeting during the press conference today.

EUR

Still treading water. Interestingly the EU have agreed to work with the UK to try and block the Impact of Donald Trump’s new nuclear sanctions against Iran. A potential flicker of unity? Only time will tell. We will be paying particular attention to Jeremy Hunt’s tone this week, it could give us a further insight into the UK’s relationship with the EU. Fearing that we sound like a broken record, hard Brexit = weak pound, soft Brexit = strong pound.

USD

GBP registered 11 month lows against the USD at 03:15 GMT this morning. Fortunately we’ve seen a slight bounce this morning, albeit a dead cat bounce. As mentioned in the GBP section above, all news is currently focused on the US-China trade deal (or lack thereof) and Iran. Remember this?

Well Iran are now suffering the consequences as per the EUR paragraph above. It will be fascinating to see whether this has an impact on USD as the week unfolds.

Any questions? Ask away below. Have a good day

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